RP to ease inventory requirement for oil cost

RP to ease inventory requirement for oil cost

Dow Jones, Manila

The Philippine government will reduce by half the inventory it is requiring local oil companies to maintain to prepare for possible supply bottlenecks as a result of war in Iraq, Energy Secretary Vincent Perez said Monday.

Perez said he signed last week an order that slashed the required in-country inventory of oil refiners to 15 days and the inventory for importers of refined oil products to seven days to ease an overstocking of fuel.

The government, in preparation for a war in Iraq, in January required oil refiners to maintain within the country a minimum stock equivalent to 30 days' supply, while oil product importers were required to keep an inventory equal to 15 days of sales.

The buildup of oil inventories had exerted pressure on the peso, since nearly all of the country's oil requirements are imported.

Perez said that as of Monday, the country's oil stock has already reached the equivalent of 77 days' supply.

"Of this, 60 days (worth of supplies) are already in the country - 33 days of which are crude (oil) and 27 days in finished products," Perez said. He said another 4 million barrels, equal to 17 days' supply, are on their way to the country from abroad.

"In April, 7 million barrels (good for 25 days) more will be shipped to the country to extend our inventory until mid-July," Perez added.